A bench of Chief Justice Manjula Chellur and Justice M S Sonak set aside the July 2015 decision of the Fare Fixation Committee, which had approved a hike in fares and recommended that the fare band for the above line be increased from Rs 9- 13 to Rs 10-110.
The bench took strong exception to MMOPL's decision to hike the fares without any consideration for the citizens.
"In order to ease out the pressure on the existing infrastructure i.e. the local trains and BEST buses, or even on the congested public roads, the metro project was envisaged. Because of this purpose, construction was permitted on/above public roads and public properties," the bench said.
"Public property is leased at a nominal rent of Re 1 for the metro project. The metro project is expected to cater to the different class of commuters," the bench said.
It said that MMOPL's decision to hike the fares "virtually amounted to converting the character of a Mass Rapid Transit System to a Class Rapid Transit System," since the increased fares would be an impediment for a large section of the society that wishes to use the metro rail service.
"According to us, these are all relevant considerations which the Fare Fixation Committee (FFC) was bound to, at least take into account in determining the metro fares," the bench observed.
It also said that the FFC be reconstituted within a month in accordance with the provisions of Metro Railways (Operation& Maintenance) Act.
CJ Chellur said the new committee must resolve the conflict over the fares "expeditiously," or within a maximum period of three months from now.
And until then, the bench said, the fares for the above metro line must not exceed the fare band of Rs 10-40.
The bench was presiding over a bunch of petitions, including one by the Mumbai Metropolitan Regional Development Authority (MMRDA), challenging the report of the Fare Fixation Committee as well as the proposal by MMOPL to hike fares for the Versova-Ghatkopar metro rail corridor.
An intervening application filed by Congress leader Sanjay Nirupam challenging the fare hike was also tagged with the petitions.
While the metro operations on the above route began in June 2014, and passengers were offered an introductory fare of Rs 10 for a one-way journey along the 11.4-km stretch, the fare was subsequently increased to Rs 10, 20, 30, and 40 depending upon the distance of the journey undertaken.
In July 2015, the metro Fare Fixation Committee suggested a hiked fare structure of Rs 10 to Rs 110 instead of the existing price band of rupees 9 to rupees 13.
Citing heavy losses, MMOPL soon after announced that the fares along the above stretch would be increase by Rs 5 beginning December 1 that year.
MMRDA, which had commissioned the Mumbai Metro, however, challenged the hike and approached the high court challenging the report of the fare fixation committee as well as the proposal by MMOPL to hike fares.
MMRDA claimed that as per the initial concession agreement among all stakeholders, the fare for the said route was to be between rupees 9 and 13, and that the fare could be revised only every four years.
It also argued that the number of metro users had come down significantly post the proposal to hike the fare.
Nirupam, meanwhile, alleged that the union government was facilitating private profiteering by allowing frequent fare hikes.
MMOPL argued that in operating the metro rail, the company was incurring losses up to Rs 1 crore each day.
On December 17, 2015, in an interim order, the high court stayed the proposed hike in fares of the Metro Rail Corridor.
MMOPL then moved the Supreme Court challenging the stay. However, the apex court had refused to interfere with the order and asked the high court to take up the matter for final hearing.
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